Valley Forge Insurance Company et al v. Washington Square Hotel Holdings, LLC, No. 2:2021cv00847 - Document 65 (W.D. Wash. 2022)
Court Description: ORDER denying Plaintiffs' 53 Motion to Compel. the Court ORDERS WSHH to provide unredacted copies of the identified documents to the court for its in camera review no later than 12/8/2022. Signed by Judge James L. Robart. (LH)
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Valley Forge Insurance Company et al v. Washington Square Hotel Holdings, LLC Doc. 65 Case 2:21-cv-00847-JLR Document 65 Filed 12/01/22 Page 1 of 7 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 9 10 VALLEY FORGE INSURANCE COMPANY, et al., CASE NO. C21-0847JLR ORDER 11 Plaintiffs, 12 13 14 v. WASHINGTON SQUARE HOTEL HOLDINGS LLC, et al., Defendants. 15 16 17 I. INTRODUCTION Before the court is Plaintiffs Valley Forge Insurance Company and Continental 18 Casualty Company’s (collectively, “Plaintiffs”) motion to compel discovery from 19 Defendant Washington Square Hotel Holdings, LLC (“WSHH”). (Mot. (Dkt. # 53); 20 Reply (Dkt. # 59).) WSHH opposes the motion. (See Resp. (Dkt. # 58-1). 1) The court 21 1 22 WSHH initially filed a response on November 14, 2022. (See 1st Resp. (Dkt. # 55).) On November 15, 2022, WSHH filed a praecipe asking the court to replace its November 14, ORDER - 1 Dockets.Justia.com Case 2:21-cv-00847-JLR Document 65 Filed 12/01/22 Page 2 of 7 1 has considered the parties’ submissions, the balance of the record, and the applicable law. 2 Being fully advised, 2 the court DENIES in part Plaintiffs’ motion and ORDERS WSHH 3 to provide unredacted copies of the documents identified below to the court for its in 4 camera review no later than December 8, 2022. 5 II. BACKGROUND 6 This declaratory judgment action arises out of the construction of a Hilton Garden 7 Inn hotel in Bellevue, Washington that began in 2015 (the “Project”). (See Compl. (Dkt. 8 # 2) ¶¶ 4.2-4.4; Answer (Dkt. # 10) ¶¶ 4.2-4.4.) WSHH, the owner of the Project, seeks 9 to recover losses allegedly caused by its former general contractor, Vandervert 10 Construction, Inc. (“Vandervert”), under insurance policies Plaintiffs issued to 11 Vandervert. (See Compl. ¶¶ 4.2-4.4, 6.3-6.5; Answer ¶¶ 4.2-4.4.) In relevant part 3, 12 WSHH asserts that Plaintiffs breached their obligation to pay Vandervert’s pre-tender 13 defense costs, and that this alleged breach, “standing alone, supports WSHH’s 14 [counterclaims].” (See 2nd MSJ Resp. (Dkt. # 41) at 2-3, 12-14.) Plaintiffs, who 15 describe the allegedly unpaid defense costs as Plaintiffs’ “sole basis of harm,” asked 16 17 2022 filing with a copy containing non-substantive corrections. (See Praecipe (Dkt. # 58); Ex. 1 (Dkt. # 58-1) (containing WSHH’s corrected response).) The court cites to WSHH’s corrected response attached to the praecipe. 18 2 19 20 21 22 Neither party has requested oral argument (see Mot. at 1; Resp. at 1), and the court concludes that oral argument is not necessary to dispose of the motion, see Local Rules W.D. Wash. LCR 7(b)(4). 3 The court detailed the procedural background of this case in its July 7, 2022 order regarding Plaintiffs’ second motion for summary judgment on WSHH’s counterclaims. (See 7/7/22 Order (Dkt. # 46) (denying Plaintiffs’ motion without prejudice so the parties can conduct discovery).) The court need not repeat this history here and instead discusses only the procedural background relevant to the instant motion. ORDER - 2 Case 2:21-cv-00847-JLR Document 65 Filed 12/01/22 Page 3 of 7 1 WSHH to produce documents that would substantiate the alleged injury. (See Mot. at 2.) 2 WSHH produced a number of emails between counsel for WSHH and counsel for 3 Vandervert’s receiver, Rick Wetmore, between July 25, 2022 and September 16, 2022, or 4 the period when Plaintiffs were allegedly in breach of their obligations to WSHH. (See 5 Mot. at 2.) WSHH redacted some sections of these emails, asserting they contain 6 attorney work product. (See Supp. Rainwater Decl. (Dkt. # 60) ¶ 2, Ex. 11 (“Privilege 7 Log”) at 4-6.) 8 Plaintiffs now ask the court to compel WSHH to produce these emails without 9 redaction. (See generally Mot.) In the alternative, Plaintiffs seek in camera review of the 10 emails. (Id. at 13.) WSHH opposes the motion, contending that the redacted portions of 11 these emails are subject to the attorney work product protection. (See Resp. at 3). 12 However, WSHH states that it would consent to in camera review of the emails. (See id.) 13 III. 14 ANALYSIS The court first reviews the legal standard for obtaining discovery of allegedly 15 privileged documents before turning to Plaintiffs’ motion. 16 A. 17 Legal Standard “Parties may obtain discovery regarding any nonprivileged matter that is relevant 18 to any party’s claim or defense and proportional to the needs of the case.” Fed. R. Civ. P. 19 26(b)(1). Under Federal Rule of Civil Procedure 37, “a party seeking discovery may 20 move for an order compelling an answer, designation, production, or inspection.” Fed. R. 21 Civ. P. 37(a)(3)(B). The “work-product doctrine ‘protects from discovery documents and 22 tangible things prepared by a party or his representative in anticipation of litigation.’” ORDER - 3 Case 2:21-cv-00847-JLR Document 65 Filed 12/01/22 Page 4 of 7 1 U.S. v. Richey, 632 F.3d 559, 567 (9th Cir. 2011) (quoting Admiral Ins. Co. v. U.S. Dist. 2 Ct., 881 F.2d 1486, 1494 (9th Cir. 1989)). The work product doctrine, however, “is 3 intended only to guard against the divulging of [an] attorney’s strategies and legal 4 impressions,” and therefore “does not protect facts . . . contained within the work 5 product.” Cal. Sportfishing Protection Alliance v. Chico Scrap Metal, Inc., 299 F.R.D. 6 638, 644 (E.D. Cal. 2014) (internal quotation marks omitted) (quoting Garcia v. City of 7 El Centro, 214 F.R.D. 587, 591 (S.D. Cal. 2003)). A party may not use the work product 8 doctrine “both as a sword and a shield. . . . Where a party raises a claim which in fairness 9 requires disclosure of the protected communication, the privilege may be implicitly 10 waived.” Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1162 (9th Cir. 1992) (citing 11 United States v. Bilzerian, 926 F.2d 1285, 1292 (2d Cir. 1991)); see also Volcan Group, 12 Inc. v. T-Mobile USA, Inc., No. C10-0710RSM, 2011 WL 6141000, at *3 (W.D. Wash. 13 Dec. 9, 2011) (holding litigant waived work product doctrine protection by using the 14 protected material “both as a sword and a shield”). A party seeking to discover 15 documents that are protected by the work product doctrine must demonstrate a 16 “substantial need” to obtain them or inability to obtain the equivalent without undue 17 hardship. Admiral Ins. Co. v. U.S. Dist. Ct. of Arizona, 881 F.2d 1486, 1494 (9th Cir. 18 1989) (citing Upjohn v. United States, 449 U.S. 383, 401 (1981)); see also Fed. R. Civ. P. 19 26(b)(3). 20 B. 21 22 Plaintiffs’ Motion to Compel Plaintiffs argue that they are entitled to the unredacted emails between Mr. Wetmore and counsel for WSHH because the redacted sections are “purely factual” ORDER - 4 Case 2:21-cv-00847-JLR Document 65 Filed 12/01/22 Page 5 of 7 1 discovery regarding WSHH’s alleged defense costs and are therefore not protected by the 2 work product doctrine. (See Mot. at 10-11.) In the alternative, Plaintiffs argue that even 3 if the redacted sections contain work product, WSHH has waived the protection by using 4 the correspondence to confirm the defense costs without producing the same 5 correspondence. (See id. at 11-13.) 6 WSHH responds that the redacted portions of the emails consist of 7 communications from counsel for WSHH to Mr. Wetmore and asserts that these 8 messages are protected by the work product doctrine. (See Resp. at 9-10.) WSHH also 9 argues that Plaintiffs do not have a substantial need for the emails because the redacted 10 text is not necessary to establish Plaintiffs’ liability for the defense costs WSHH 11 allegedly incurred. (See id. at 12.) WSHH argues further that Plaintiffs can access the 12 information contained therein through the invoices already produced or by deposing Mr. 13 Wetmore. (See id. at 12-13. 4) 14 To begin, the court notes that the parties dispute the number of emails at issue. 15 (Compare Reply at 5 (contending that “there are at least nine emails at issue”), with Resp. 16 at 10 (asserting that Plaintiffs’ motion refers to three emails).) The court concludes that 17 counsel for WSHH and Mr. Wetmore had nine email exchanges during the relevant 18 period, identified by the following Bates numbers: WSHH194969-71; 19 WSHH194972-75; WSHH194979-81; WSHH194982-83; WSH194984-90; 20 21 22 4 WSHH also uses much of its brief to argue the merits of its counterclaims. (See Resp. at 4-10.) These arguments are not properly before the court on Plaintiffs’ motion to compel discovery, and the court need not address them here. ORDER - 5 Case 2:21-cv-00847-JLR Document 65 Filed 12/01/22 Page 6 of 7 1 WSHH194997-5001; WSHH195002-09; WSHH195011-18; and WSHH195019-47. (See 2 Privilege Log at 4-6.) 3 The court concludes that in camera review of these emails is necessary to 4 determine whether the redacted portions of the emails are protected by the work product 5 doctrine. See, e.g., Gamble v. State Farm Mutual Auto. Ins. Co., No. C19-5956RJB, 6 2020 WL 4193217, at *4 (W.D. Wash. July 20, 2020) (ordering in camera review where 7 it was “not obvious to the [c]ourt whether” disputed materials were subject to privilege); 8 Grayless v. Allstate Ins. Co., Case No. C21-5492DWC, 2021 WL 6498255, at *3 (W.D. 9 Wash. Dec. 16, 2021) (same). Following its review, the court will determine whether to 10 compel WSHH to produce the unredacted emails. 11 C. Attorneys’ Fees 12 Each party requests attorneys’ fees incurred in bringing or defending this motion. 13 (See Mot. at 13; Resp. at 13.) The court declines to rule on this issue at this time; rather, 14 it will address whether fees should be awarded after it has conducted in camera review of 15 the emails. 16 17 IV. CONCLUSION For the foregoing reasons, the court DENIES in part Plaintiffs’ motion (Dkt. # 53) 18 and ORDERS WSHH to provide unredacted copies of the following documents to the 19 court no later than December 8, 2022: WSHH194969-71; WSHH194972-75; 20 21 22 ORDER - 6 Case 2:21-cv-00847-JLR Document 65 Filed 12/01/22 Page 7 of 7 1 WSHH194979-81; WSHH194982-83; WSH194984-90; WSHH194997-5001; 2 WSHH195002-09; WSHH195011-18; and WSHH195019-47. 3 Dated this 1st day of December, 2022. 4 5 A 6 JAMES L. ROBART United States District Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 ORDER - 7
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